Amazon is poised to disrupt the healthcare experience through several initiatives: 1) Acquiring PillPack to simplify prescription drug delivery and management. 2) Partnering with health companies like Xealth to allow doctors to "prescribe" customized bundles of products for patients through an online portal. 3) Exploring opportunities in areas like meal planning/delivery tailored for medical conditions, voice assistants for healthcare needs, and opening primary care clinics for employees.

1. Why Amazon is poised to disrupt the healthcare experience
Prepared by Kristin Mengel and Kristina Przitulsky | August 2018
“ A L E X A , R E F I L L M Y P R E S C R I P T I O N ”
1

2. 2
T H E H I S T O R Y O F A M A Z O N

3. 3
“We seek to be earth’s most
customer-centric company; to build a
place where people can come to find
and discover anything they might
want to buy online.”
A M A Z O N ’ S V I S I O N

4. 4
W H E R E A M A Z O N W I N S
1. Invest in large, upfront, fixed cost aspects of
business (e.g. warehouses, data centers)
2. Bring standardization to messy, unstructured, and
fragmented back-office functions (e.g. logistics)
3. Add transparency and a platform for companies to
distribute goods and services so companies can
focus on their core competencies and outsource
the rest to Amazon
*https://www.cbinsights.com/research/briefing/amazon-strategy-in-healthcare/

5. 5
W H A T I S D I S R U P T I V E I N N O V A T I O N ?
“Because disruption can take time, incumbents
frequently overlook disrupters.” – Clayton Christiansen
Disruptive innovation is a business term that refers to an innovation that creates a new market and value
network and eventually disrupts an existing market and value network, displacing incumbents.

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W H O A R E T H E D I G I T A L D I S R U P T O R S I N P H A R M A ?

7. 7
Rising cost of care
Cost of R&D for
lost opportunities in smaller
populations
Customer Experience
and expectations changing
Value requirement
from regulators/ payors
Pain points in
system
MD offices
Pharmacies
Consumer power/data
sharing/health and wellness
priorities
Biggest tech players
are making a move
Generational
differences
P h a r m a & H e a l t h c a r e a r e r i p e f o r d i s r u p t i o n

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A M A Z O N I S C A P I T A L I Z I N G O N H E A L T H C A R E T R E N D S O N
T O D I S R U P T T H E $ 3 T S E C T O R
Most people have high-deductible plans
Most employers are self-insuring
Generics are a bigger and bigger part of prescription
drug share
Administration overhead has exploded
Image source: Optum
Image source: Athena Health
Image source: Kaiser Permanente
Image source: Kaiser Permanente https://www.cbinsights.com/research/briefing/amazon-strategy-in-healthcare/

9. 9
A P P O I N T M E N T O F D R . A T U L G A W A N D E
“I have devoted my public
health career to building
scalable solutions for better
healthcare delivery that saves
lives, reducing suffering and
eliminating wasteful
spending.”

10. 1 0
Preclinical
R&D
Clinical
trials
Manufacturing
& distribution
Sales &
promotion
Patient
experience
B i o p h a r m a c e u t i c a l v a l u e c h a i n

11. 1 1
Inbound
logistics
Operations
Outbound
logistics
Marketing
& sales
Service
a m a z o n ’ s v a l u e c h a i n

12. 1 2
100 years ago
Human touch
25 years ago
Machine assisted/ analog
Today
Technology enabled/ digital
H e a l t h c a r e i s e v o l v i n g t o k e e p s t e p w i t h t h e
n e w e x p e c t a t i o n s t h a t h a v e b e e n c r e a t e d
b a s e d o n t e c h n o l o g i c a l c h a n g e .
https://www.kleinerperkins.com/perspectives/internet-trends-report-2018/

13. 1 3

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A M A Z O N A L E X A A N D H E A L T H C A R E
What is Amazon doing?
• Amazon is building a 12-person health and wellness team within
its Alexa division to help make the assistant more useful to the
healthcare sector
• Diabetes management, care for the elderly, and care for new
mothers and infants are the focus of the team’s work
• Last year, Amazon teamed up with Merck to encourage app
developers to build Alexa apps to help people with type 2
diabetes
• Amazon is looking at HIPAA compliance for Alexa
What does this mean for consumers?
• Voice-based search queries are the fastest-growing mobile
search type as comScore estimates half of all searches will be
performed via voice by 20201
• Example: Health insurance is complicated for many American
consumers to navigate. To help with this, Cigna launched a voice
skill to help answer more than 150 common healthcare questions
for their customers.

15. https://www.voicebot.ai/2017/07/14/timeline-voice-assistants-short-history-voice-revolution/
Carnegie Mellon
completes Harpy
Program. It
understood
1,000 words.
Microsoft
introduces
Clippy
Microsoft
introduces
speech
recognition
feature for
Office XP
IBM’s
Watson wins
Jeopardy!
April 14:
Apple
introduces
Siri
Microsoft introduces
Cortana at annual BUILD
developer conference
Amazon officially
launches Amazon
Echo in US
Microsoft launches
Cortana on Windows
10 desktops and
mobile devices
Microsoft Cortana
added to mobile
platformsAmazon introduces
Alexa & the Amazon
Echo, available to Prime
members only
IBM introduces
the IBM Shoebox,
the first digital
speech
recognition tool.
It recognized 16
words and digits.
Dragon launches
Dragon Dictate, the
first speech
recognition product
for consumers
(only $6,000)
Google
launches
Google Now
Amazon
introduces the
Alexa Skills kit
1961 1972 1990 1996 2001 2011 2012 2013 2014 2015 2016 2017 2018
SoundHound
launches voice-
powered virtual
assistant app,
HOUND
Amazon launches
Amazon Echo Dot &
Amazon Tap
Google introduces the
Google Assistant as
part of messaging app,
Allo
Microsoft adds
Cortana voice
control to Xbox
One
Amazon
Launches
Echo in UK &
Germany
Samsung acquires
virtual assistant
startup Viv
Amazon cuts price of 2nd
gen Echo making it even
more accessible at $49
Google launches
Google Home &
Smart phone Pixel
Chinese
Manufacturer
LingLong launches
Echo Competitor,
DingDong
Actions on
Google
Platform
launches
Google Home
Samsung introduces Bixby
alongside Galaxy S8
device
Alexa skills surpass
10,000 in US
Google Home
launches in UK
Google introduces
multi-user support
for Google Home;
can recognize 6
different voices
Amazon introduces
the Echo Look
Baidu unveils its
first device, Xiaoyu,
in China
Harman Kardon reveals
new speaker, using
Cortana
Amazon introduces
calling/messaging
feature for Echo
Devices
Apple introduces
HomePod
Amazon Echo Show
launches
Alibaba launches
GenieX1 Smart
Speaker
H O W D I D W E G E T H E R E ?
Contrary to popular belief, voice assistants have been around since the 1960s!
15

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V O I C E O P P O R T U N I T Y F O R H E A L T H M A R K E T E R S
Voice search has long been a hot topic of opportunity for brands,
and research now shows it is growing at a hyper-adoption rate
• As the pharma industry continues to adopt a “support beyond the pill” strategy
to ensure medicines are used to the fullest potential, there is opportunity to
leverage voice technology as an extension of brand support programs
• Developing blueprint skills to help manage chronic illness such as medication
reminders, integration with patient tracking tools, logging upcoming doctor
appointments, and disease education can also help brands improve
medication adherence and persistency
• Echo devices now offer video, creating an opportunity for telemedicine
integration
Recommended approach for brands
1) Start with a real business problem
2) Test in a low risk environment
3) Build internal expertise
4) Make a business case for larger rollout
Nearly 1 in 5 US adults have
smart speaker devices in their
home – use of voice-powered
devices have grown to 47.3
million US adults in two years,
amounting to 20% of the US
adult population1

17. 1 7
A M A Z O N A N D P I L L P A C K
What is Amazon doing?
• Amazon acquired online pharmacy PillPack on June 28th, 2018
• PillPack organizes and delivers packages of medications for
consumers, sorting medications into individual packets and
simplifying the process for patients taking multiple medications
• The online pharmacy start-up also works directly with consumers’
doctors to monitor and manage refills
What does this mean for consumers?
• More than ever, consumers expect on-demand services that
make it easier to get what they want and when they want it
• Healthcare is catching on. Now, consumers have less hurdles to
jump and barriers to overcome when filling and re-filling
prescriptions
• Through innovation, companies are investigating ways to reduce
the friction patients experience when managing their health

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D E L I V E R Y O P P O R T U N I T Y F O R H E A L T H M A R K E T E R S
Patients list forgetting to refill their prescription (30%) as one of the leading cause for why they do not
remain adherent to treatment, along with “too much trouble” and friction at the pharmacy1
• Caregivers, caregivers, caregivers! Older patient populations rely heavily
on the support from a loved one, such as young children, when it comes to
their effectively managing their health
• When marketing convenient solutions, keep in mind the prominent role
caregivers play in health decisions for patients. Delivery methods help
remove refill barriers for patients while also lightening the burden for their
loved ones
• Opportunity to include branded messages with prescriptions, helping to
keep your brand and educational assets top of mind throughout the
journey
Recommended approach for brands
1) Explore additional delivery partnerships through retailers like CVS and
start-ups like Capsule
2) Test in a low risk environment
3) Build internal expertise
4) Make a business case for larger rollout

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B R I N G I N G R X D E L I V E R Y T O L I F E
Month 1 Refill Month 2 Refill Month 3 Refill Month 4 Refill Month 5 Refill Month 6 Refill
Diagnosis
Patient is prescribed
medication
At time of diagnosis,
HCP can assist new
patients signing up
for Rx delivery
Opportunity to send
a welcome material
such as a treatment
checklist with the
first delivery
First refill –
Opportunity to
include branded
dosing and
adherence
reminder or
highlight a brand
patient support
program
Second refill –
Opportunity to include
branded adherence
reminder or priority message
Third refill –
Opportunity to include
branded adherence
reminder and information
about the condition to help
patients remain engaged
Fourth refill –
Quick dosing reminder,
helping patients stay
engaged with their treatment
Fifth refill –
Quick dosing reminder, helping
patients stay engaged with their
treatment
Sixth refill –
Quick dosing reminder,
highlight importance of
staying adherent for the
longer term to effectively
manage their condition

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A M A Z O N A N D X E A L T H
What is Amazon doing?
• Amazon and digital prescription platform, Xealth, are piloting a program
allowing doctors to “prescribe” bundles of customized healthcare
products and content for patients as they’re discharged from the hospital
through an online portal
• Patients can sign in to the portal from the comfort of their home to order
medications and bundles for delivery, and receive discounted costs if
ordered through Amazon Prime
• The pilot program uses cloud-based technology for prescribing
customized digital healthcare content and is already being used at
Seattle-based Providence Health as well as the University of Pittsburgh
Medical Center
What does this mean for consumers?
• The Amazon and Xealth partnership will help bridge the gap between a
visit to the doctor’s office and the medication or supplies needed being
received by the patient
• Increased health benefits – doctors have the ability to reach out to
patients through the portal, creating potential for a reminder system that
would help keep patients on track with treatment

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B U N D L E O P P O R T U N I T Y F O R H E A L T H M A R K E T E R S
• The program will likely be embraced by the global aging population,
where demand for home care services continue to rise, particularly for
those with chronic conditions
• Eventually, medications may be included in the bundles of
recommended products delivered by Amazon
• Future opportunity to integrate with bundling initiative to extend patient
patient support programs for new patients, helping them start on
treatment and stay on treatment successfully
Recommended approach for brands
1) Identify key markets or hospitals for test partnership
2) Test in a low risk environment
3) Build internal expertise
4) Make a business case for larger rollout

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B R I N G I N G R X B U N D L I N G P A R T N E R S H I P S T O L I F E
POC
• Discovery partnership with Amazon
and Xealth to enable doctors to
prescribe helpful adherence
materials such as smart pill bottles,
along with medication prescriptions
At Home
• Deliver smart pill bottle with treatment
medication at first prescription fill
• Opportunity to explore including helpful
materials like a branded treatment
checklist with the first delivery
On-Demand
• Leverage delivery partnership to enable
automatic prescription refills and on-
demand delivery for the longer term,
reducing friction at the pharmacy for
patients
• Opportunity to include branded
adherence messaging with each
prescription

23. 2 3
M E A L T A I L O R I N G F O R C O N D I T I O N S
Meal tailoring to boost Amazon Fresh and Pantry Business
https://www.cbinsights.com/research/briefing/amazon-strategy-in-healthcare/

24. 2 4
• Rumor has it, Amazon has created a secret lab within its Seattle HQs called Grand Challenge (known
internally as 1492 and Amazon X) dedicated to working on ideas as bold as curing cancer
• The division is primarily focused on cancer research and technologies related to medical records, since
the group’s creation in 2014, it has added more than 50 people
• Amazon has invested heavily in health start-up Grail as a future customer of it’s cloud business
• The lab is exploring ways to tap into medical providers’ electronic records to make the data more
accessible for consumers and their physicians
• In the future, Amazon is hoping to build a platform for telemedicine, which in turn could make it easier
for patients to have virtual consultations with doctors
F u t u r e S o l u t i o n s : A m a z o n 1 4 9 2 s e c r e t l a b

25. 2 5
• Amazon’s ambitious plan to bring down the cost of healthcare is getting an early test in its Seattle
headquarters as the giant is in internal discussions to open primary care clinics at its main office
• The pearly plan is to hire a small number of doctors to start a pilot clinic later this year for a select group
of Amazon employees and then expand to more workers in early 2019
• It is thought that Amazon is leveraging local clinics to create a business prototype before expanding them
outside its employee base
• In making primary care closely and directly available to employees, Amazon's chances of seeking
preventative care increase which, in turn, can drive down hospital visits and costs
• With the acquisition of Whole Foods, there is potential to build out retail pharmacies and care clinics,
offering same day delivery
F u t u r e s o l u t i o n s : A m a z o n C a r e C l i n i c s

26. 2 6
• Claims administration and benefits management
• Pulling data from medical records and cleaning it up
• Personal health records and opportunity to integrate Echo or Alexa patient data with EHR
• Medicare and Medicaid management
• Prime has low penetration/ high growth prospects in low income and older populations
A d d i t i o n a l a r e a s o f o p p o r t u n i t y n o t d i s c u s s e d

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K R I S T I N M E N G E L
VP, Strategy Director
Kristin.Mengel@hhcc.com
K R I S T I N A P R Z I T U L S K Y
Strategist
Kristina.Przitulsky@hhcc.com
Q U E S T I O N S O R C O L L A B O R A T I O N S ?
L E T ’ S C O N N E C T
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28. T H A N K Y O U .
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T H A N K Y O U .